Monday, November 23, 2009

DEIS: Over 11,800 housing units needed

DEIS: Over 11,800 housing units needed

Tuesday, 24 November 2009 02:43 by Therese Hart | Variety News Staff

THE civilian housing demand during the military buildup will be generated not by Marines and their dependents since they will be living on-base, but rather by civilian military workers and off-island workers who are seeking employment because of the buildup and there are major challenges that should be taken into account, according to the draft environmental impact statement.

Temporary workforce housing was not included because it is assumed that all H-2B worker housing would be provided by construction contractors and would not generate demand in the private market.

Housing needs

Another factor taken into consideration is the possibility of a typhoon disaster. If a typhoon were to hit Guam, currently available housing units may be destroyed, creating higher demand for new housing units. Higher demand would stem from a lower number of currently available housing units and a possible spike due to the presence of temporary relief workers.

According to the environmental report, the combined total impact of the military buildup would be a demand for 11,893 new units in the peak year of 2014, falling to 3,205 by 2020.

Comparing total housing demand on Guam with and without the proposed action, at the 2014 peak, housing demand with the proposed action is 17 percent higher than it otherwise would have been, without the project. At 2020, the difference declines to 4 percent.

According to the report, the likely available housing was estimated at 2,787 units at the start of the project construction in 2010.

During the construction period of the buildup, since such a large amount of materials will be used for military base construction, building materials for other projects such as civilian housing will be in short supply.

Cement shortage

Shortages of cement obtained from Japan, Korea and Taiwan were already evident in 2008. A new four-to-six silo cement storage facility at the Port Authority of Guam is expected to be completed by mid-2010, but whether this facility alone would be sufficient to consistently meet any rapid spikes in demand from the Maine Corps relocation, particularly its indirect effects, is questionable.

Labor supply is also expected to be an issue, stated the report. The requirement for construction workers to build civilian housing is an increment above and beyond labor demands.

An overriding issue regarding housing supply to demand is the willingness of the housing construction industry, or even individual owners, to invest for very short-run profit windows of opportunity.

The spike in housing demand is expected to last only from 2010 to 2014. Should housing supply construction accommodate the short-term housing demand fully, substantial vacancies rates can be expected after 2015 and a significant housing glut is possible.

This short window of high demand means those building rental housing might expect only up to four years to gain adequate returns on their investment, with long-term prospects being highly speculative.

The third factor that could impede a full response by the housing construction sector is the capability of Guam permitting agencies to review and issue housing construction permits sufficiently quickly to meet demand. The report mentioned that the Department of Public Works and the Department of Land Management are understaffed.

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